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THG rejects numerous 'unacceptable' takeover offers

·Business Reporter, Yahoo Finance UK
·2-min read
THG PLC (The Hut Group)
THG reiterated its sales target for 2022, but warned that earnings growth would be flat due to surging commodity costs. Photo: Pavlo Gonchar/SOPA/LightRocket via Getty Images

Ecommerce group THG (THG.L) has revealed it rejected several “unacceptable” takeover approaches as it warned of soaring costs.

The company, which owns brands including MyProtein and Cult Beauty, said on Thursday it received “indicative proposals from numerous parties in recent weeks”, but that the board found the offers failed to reflect the fair value of the business.

“The board has concluded that each and every proposal to date has been unacceptable, failing to reflect the fair value of the group, and confirms that THG is not currently in receipt of any approaches,” its chief executive and founder Matthew Moulding said.

“We continue to focus on delivering our exciting growth strategy across a number of large global sectors, and prepare to step up to the premium segment of the LSE at the appropriate time.”

It confirmed that there were no longer any ongoing conversations.

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Shares rose as much as 8% in early trading before paring back to be 3.5% higher.

THG, previously known as The Hut Group, has faced mounting speculation that it could be taken private after its value nosedived after its 2020 stock market float.

It came as the company reiterated its sales target for 2022, but warned that earnings growth would be flat due to surging commodity costs.

Revenues increased by 16.3% to £520.2m ($680m) for the first quarter of 2022, but it now expects sales growth of between 22% and 25% this financial year, with a potential loss of about 1% in revenue from the Ukraine war.

It again highlighted particular surges in the cost of whey protein. In January it issued a profit warning due to the rocketing price of whey protein used in protein shakes, adding that early 2022 was set to be more challenging than last year's lockdowns.

The firm will look to raise prices at a lower level than its cost inflation, and use efficiencies in its operations to absorb some pricing pressures, it said.

Moulding added: “In our first full year as a public company, 2021 saw us scale revenue and expand our business model, well ahead of targets set at IPO.

“I would like to thank all THG colleagues for their dedication and hard work in helping us achieve such a strong performance for the year. We remain confident in delivering our strategic growth plans for the year ahead and beyond, with full support from the board and our new chairman.

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